Tenancies Act

NEW LAW FOR RENT

Law 4/2013 on Measures for Promoting Flexibility and Rental Housing Market , from June 4, 2013 , published in the Official Gazette on 06.05.2013 , substantially modifies the current Tenancies Act , specifically sections 4 and 5, 7 to 11, 13 to 20, 23 to 25, 27 , 35 and 36 . Here you can access the updated text of the new Rent Act to the new wording of those articles after this reform.

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PREAMBLE

The legal status of urban leases is currently regulated by the text of the Tenancies Act 1964, approved by Decree 4.104/1964 , of December 24 .

The principles underlying the tenancy law reform carried out in 1964 , as stated in the Explanatory Memorandum of Law 40/1964 , of temper were the liberalizing movement of urban property to the economic circumstances and the requirements of justice. However, the revised text did not reach its goals to unlock the frozen income situation . The quoted text devoted also a subrogation regime , both inter vivos and mortis causa , favorable to the interests of the tenant .

Both circumstances dictated a policy framework that practice has shown that encouraged the use of the school barely rentable .

Under these circumstances , the Royal Decree -Law 2/1985 , of April 30 on Measures Economic Policy , introduced two changes to the regulation of urban leases regime who have had an enormous impact on the subsequent development of this sector. These modifications were freedom for local housing transformed into business and the freedom to agree on the duration of the contract , eliminating the mandatory nature of the forced extension in urban leases .

Royal Decree -Law 2/1985 has had mixed results . On the one hand, it shows that the downward trend in the percentage of rental housing that was occurring in the early eighties to stop, but could not substantially reverse the sign of the trend. On the other hand , however , has generated an enormous instability in the rental housing market by giving rise to a phenomenon of short-term contracts . This in turn has led to increased movement of significant income , which has been exacerbated by their simultaneity in time with a period of rising prices in the housing market .

At present , the market for urban housing leases are characterized by the coexistence of two distinct situations . On the one hand , contracts concluded pursuant to Royal Decree -Law 2/1985 , representing approximately 20 100 of the total and are characterized by high incomes and a significant degree of occupational turnover widespread consequence of its annual duration . On the other hand , contracts entered into before the date of entry into force of Royal Decree -Law 2/1985 . In general , this is not high -income contracts and , in the case of contracts entered into before Tenancies Act , 1964 , approximately 50 100 of the total, with rents that can qualify as uneconomic .

Dysfunctions that this situation generates in the market are such that they have become an alternative to leasing unattractive against the acquisition of ownership in relation to the solution to the housing problem . Thus, only 18 of the approximately 100 total housing stock is under lease .

Therefore, the ultimate aim pursued by the reform is to contribute to enhancing the urban rental market as a basic piece of a housing policy guided by the constitutional mandate enshrined in Article 47, to recognize the right of all Spanish to enjoy decent and adequate housing .

Achieving this goal requires an amendment regulation to establish a proper balance in the performance of the parties, and although it is clear that the regulatory change by itself is not a sufficient condition to enhance the offer in this sector , it is a condition necessary for this to occur.

The substantive regulation of the lease must clear differentiation from treatment of urban rents and housing intended for any other use other than housing , to understand that the underlying economic realities are substantially different and deserving , therefore, of disparate regulatory systems that echo of that difference.

In this sense , while maintaining the protective nature of the regulation of urban housing leases , is chosen in relation to other uses by regulation as absolute based on the free consent of the parties .

In addition , the law contains a partial reform of the regulation of arrendaticios processes and modification of the regime currently in force contracts .

The regulation of urban housing leases presents significant developments , primarily in relation to its duration. In this regard , it was decided to establish a minimum term of five years contract , to understand that within these features allows a certain stability for households enables them to contemplate the lease as a valid alternative to ownership. At the same time , it is too long that could constitute an obstacle to both private landowners and business promoters sitúen homes in this market.

The minimum term is built from freely agreed between the parties on the initial contract period plus annual renewals system until reaching the mandatory minimum of five years duration, if the initial agreement had been for a shorter period .

The law also introduces a mechanism for tacit renewal , was at least the warranty period of five years , which gives rise to a new term articulated also on an annual, three years.

The recognition of the existence of situations that require shorter periods of time has made ??the law provides for this possibility, but linked exclusively to the need , known at the time of conclusion of the contract , to recover the use of leased housing to address the own landlord .

The establishment of a limited term of mitigates the impact of the Institute of subrogation may have on the balance of benefits. To the extent that the right of persons subrogated to continue using leased housing continues only until the completion of the contract period , no objection to keep that right in the field ” mortis causa ” in favor of those with direct link to the lessee . An outstanding new recognition of the right to cohabitant ” cohabitees ” .

In relation to inter vivos substitutions , only recognized its existence prior written consent of the lessor. At the same time , it introduces a novelty in cases of judgments that , in processes of annulment, separation or divorce , the spouse assigned housing not owner. In these cases , it is recognized “ex lege ” to the spouse the right to continue using the property leased by the remainder of the contract period .

The income scheme is built around the principle of freedom of agreements between the parties to the determination of the initial rent for both new contracts to those who stand with tenants already in place. This segurará , when this is necessary , as income from contracts allow market reflect reality , if this could not actually move to the income by way of planned updates . This may be so, because the rule provides an update mechanism of income linked to percentage changes that you may experience in any one year the Consumer Price Index .

As regards the rights and obligations of the parties , the law broadly maintaining current regulation without introducing great innovations . An exception is the establishment of a special provision for affected tenants with disabilities or disabled dependents, who intend to make changes to the leased property that enhance the use of the same .

It also maintains the right of first refusal in favor of the tenant in the event of sale of the leased property during the term of the lease although referring to market conditions, on the understanding that is an instrument without posing a serious onerous for the landlord increases the likely to stay in housing tenant .

Finally, with regard to the award of contracts , the law maintains the freedom of the parties to opt for oral or written form . At the same time, expressly stipulates the possibility of all leases , regardless of its duration, to access the Land Registry , trying, on the other hand , leverage this accessibility by linking certain building measures or benefit to the fact of registration. This not only helps to strengthen the guarantees of the parties, but increases the information available to the state , allowing the design and implementation of measures that can contribute to improving the management rules and practice of the degrees.

Tenancies law abandons the traditional distinction between urban rental housing and commercial leases and similar business to differentiate between urban rental housing , which are those dedicated to meeting the need for permanent housing tenant, his spouse or dependent children , and leases for uses other than housing , a category which includes leases of second homes, the season, the local traditional business and treated as such .

This new categorismo is based on the idea of ??granting the tenant protection measures only where the purpose of the lease being satisfying the housing needs of the individual and his family , but not in other cases where economic needs are met , recreational or administrative .

To do this, in the regulation of urban leases for non-residential use , the law chooses to leave the parties freely agreed between all elements of the contract , constituting free extra regulation pact also allows a wide use of the procedure of Civil Code .

It regulates and , additionally to the expressed will of landlord and tenant, the conservation regime and work obligations , the right of first refusal , the transfer and subrogation ” mortis causa ” , but limited to the spouse and children of the tenant continue the activity.

Regulation is introduced in this new release consisting of the tenant’s right to be compensated when , wanting to continue the lease , must leave the premises by the lapse of the period provided , if somehow the landlord or a new tenant could benefit from customers obtained by the former tenant , or alternatively, removal costs and damages resulting from the same , when the tenant is forced to move their activities .

The tenancy deposit remains mandatory in both housing and different use , noting the amount in one or two months’ rent , as rental housing or other use . At the same time it allows the Autonomous Communities in housing powers governing the mandatory deposit on behalf of the Community itself , as the returns generated by these funds have emerged as an important source of funding for regional housing policies , which is considered to be maintained.

In regulating arrendaticios processes provides that the jurisdiction to hear disputes shall , in any event, the Court of First Instance of the place where the property is situated urban , excluding the possibility of modifying the functional competence via express submission different judge or implied .

This recall does not preclude the possibility that the parties to the legal relationship may agree to resolve their disputes , the use of arbitration.

The processing arrendaticios process defers to the judgment of cognition , making express reservation of cases under the judgment of eviction and judgment when executing verbal , in this case , actions to determine income or amounts shall be paid to the tenant.

Also regulated , the conditions under which the tenant may weaken evictions action promoted by the non-payment of amounts due under the rental agreement . This regulation clarifies significantly the enervation and rehabilitation possibilities contained in the revised text of 1964 .

In the case of joinder is established, along with traditional regulation , the possibility of accumulation that assists tenants when proceedings commenced merge into common events and are directed against the same landlord . Also allows it in cases of termination for non-payment, the accumulated exercise and simultaneous action to terminate the contract and claim the amounts due.

Finally , and as most significant development Tenancies law in procedural matters , regulation establishes appeal in tenancy by understanding that matter , given its importance and significance of the regulatory changes introduced this rule , should be subject to legal doctrine developed in Supreme Court building . As most characteristic of the appeal may be noted the following : only be susceptible to the appeal the rulings issued in the procedures followed by the trial of cognition , provided that the judgments of first and second instance fails to conform, and income of contracts is below the limits enshrined by law . As regards existing contracts to the entry into force of this law , those held pursuant to Royal Decree -Law 2/1985 have no particular problem since it has been on the free will of the parties that has determined the regime of the relationship as far as regards duration and income . Therefore, these contracts will continue until terminated subject to the same regime that came so far still .

At that time, the new tenancy that can be on the property shall be subject to the new rules. This regulation does except for those contracts which, although dated after May 9, 1985 , have been concluded subject to the regime of forced extension , in deriving this free agreement between the parties .

As regards contracts previously concluded, the law chooses a solution that tries to combine the simplicity maximum possible with a balanced treatment of the different situations in which the conflicting parties meet. Thus , we introduce an approach that maintains the criterion of differential treatment between housing leases and local business of providing milder conditions modification that housing tenant of commercial premises .

Considering the harmful effects it has had the effect of extending long -mandated Act of 1964 , addresses the need to limit the duration of this temporary mandatory extension restoring tenant relationship in accordance with its own nature but this change is made taking into account the social and economic effects of the measure taking into account the personal and family situation and the economic capacity of the tenants.

In this regard, the rental housing you opt for total abolition of subrogation ” inter vivos ” , except for the derivative of a court in matrimonial proceedings , and for the gradual abolition of rights of subrogation ” mortis causa ” that the revised text of 1964 recognized .

As this measure affects potential situations whose rights are different, original contract holders tenants , landlords and tenants first surrogacy surrogacy second , the rule should provide appropriate responses for each . Hence the elimination of subrogation is the more gradual the higher the potential content rights Tenancies law provides for each course from the general principle of keeping the current tenant and your spouse the right to continue in the use of leased housing until his death where this right they were recognized by the 1964 legislation .

As regards the system of rents , the law chooses to try to unlock the frozen income situation . To this end , establishing a system of review applicable to all prior to May 9, 1985 , which seeks to recover not passed on variations in inflation from the date of conclusion of the contract or the last legal review, as appropriate . This revision does not occur immediately but gradually , increasing the number of years that the total revision occurs in inverse tenant ‘s rent , enabling tenants to lower economic level to adapt their economies to the new reality .

For tenants of low-income , under two and a half , three or three and half times the minimum wage based on the number of people who live in rented housing , excluding income reviewing sending each to the Government for the period of one year from the entry into force of the Act set up a compensation mechanism for those landlords fiscal nature which could not , by the circumstances described above proceed to update rents.

It also gives landlords the right to enjoy benefits in the wealth tax , the property tax on the cost of maintenance of the leased property and the cost of services and supplies to enjoy the rented premises in these three cases by imputing their amounts to tenants. In the case of leases of business premises, it was decided to coordinate an agenda temporal resolution of these contracts , although distinguishing between leases in which the tenant is a natural person of those in which is a legal person , assuming greater financial solvency where the more complex organizational framework .

Therefore remain , albeit limited , subrogation rights upon death in the first case , ensuring the family group linked to the development of the activity, a minimum of twenty years may be exceeded while the tenant and your spouse live and continue the exercise of the activity that comes developing in-house.

For leases of legal persons are configured rated resolution times , between five and twenty years, depending on the nature and volume of activity in the leased premises , configured within short duration for those leases in which they develop activities with economic potential such that place holders of these contracts in equilibrium positions on landlords when negotiating new lettings conditions .

As for the rent paid on these contracts , reproduces review scheme established for residential leases , graduating temporarily the rate of review in accordance with the categories set out above .

To promote continuity of tenants, the Tenancies Act regulates a newly created figure is the preferred leasehold , which gives the tenant a preferential right to continue using the leased premises at the time of termination of the contract , to any third party at market .

It also stipulates a compensation law should not continue using the leased premises when another person, whether the owner or a new tenant , customers can benefit from the activity generated by the former tenant .

As assimilated urban leases , tenancy both the local and the business, are given a treatment similar to leases of business premises , on hours and income scheme .